This week in Greece, citizens are emerging from a weeks long lockdown imposed to stem the spread of the coronavirus. Businesses here are devastated. Half the hotels in the country are threatened with bankruptcy. Prime Minister Kyriakos Mitsotakis, for his part, is doing everything in his power to pull Greece up by her bootstraps. Meanwhile, German tours giant TUI seems to be stuck in some medieval mind set wholly focused on a cash flow patch for its COVID-19 wounds.
I was just reading how TUI’s CEO Fritz Joussen is calling on EU member states to develop a “roadmap for travel” to help the beleaguered German conglomerate sell holidays for 2020. According to the news Joussen say governments needed to provide a “clear perspective” on tourism within Europe so that his company can squeeze in some trips and revenue.
No, the former Mannesmann Mobilfunk Gmb executive did not say this in so many words, but the typical German stoicism was there, and in spades. Joussen was also quoted as highlighting 2021 bookings being at a “favourable level.”
“This includes opening up with tourism and air travel to countries and regions of Europe that have made good progress and are actively promoting the return of holidaymakers.”
Meanwhile, at the moment the debt ridden TUI waves a mighty hand over countries devastated to their cores, the Greek Prime Minster is describing potential conditions that will allow foreigners to enter the country. Kyriakos Mitsotakis says key factors include: prior testing for COVID-19, European health protocols, and monitoring, while emphasizing that the Greek vacation experience will be radically different from the previous years.
The Greeks are already busy creating the so-called “road map” TUI is begging for. But, the Greeks are being far more open about the situation than the corporations that seem only too ready to take advantage. Mitsotakis points out that given the rules of social distancing and the course of the pandemic will dictate actions.
TUI is touting destinations like Greece, Cyprus, Portugal and the Balearics as possibilities for upcoming travel sometime in 2020. The company is also ready to go full steam ahead with cruises as fast as they can. This Telegraph story cites TUI Cruises bosses touting rebooking rates and a boom season a coming. I’ve no doubt these are gesticulations to appease worried investors quivering over the company’s losses due to the pandemic.
The Times says TUI is going to need a “sizeable equity raise” within the next year or two as regulators try to wean the travel industry off of using customers’ deposits to bankroll operations. TUI has cancelled holidays for nearly 900,000 of its customers, with full cash refunds due by 13 May under the Package Travel Regulations. But reports say the company is pleading for more time to pay such refunds.
World Economy News is reporting that Germany accounts for more than half of the emergency coronavirus state aid approved by the EU. The report reveals that Germany makes up for about a quarter of the EU’s GDP, but so far accounts for some 52% of the total value of the emergency coronavirus state aid cleared.
Among the biggest recipients, TUI was approved for €1.8 billion euro loan commitment according to the reports. TUI AG stocks are in the tank hovering at 5-year time lows. They’re desperate, and the safe reopening of southern Europe seems to be taking a back seat to expediency, if you ask me. The company says it will launch holidays to Ibiza and Majorca first when Spain ends their lockdown.
Meanwhile, the German traveler preference for Mallorca and the Balearic Islands has officials in the willing to do anything to get TUI vacations going again. The Minister of Tourism, Iago Negueruela, held a virtual meeting with senior executives from the TUI Group in which both parties agreed to work together to ensure there is a flow of tourists to the region once the health crisis is overcome.
Greece’s Kyriakos Mitsotakis was interviewed by CNN recently. In the interview the Greek PM discussed “perspectives” and how his country has been made the “punching bag” of Europe. In my view, TUI and companies like it, have been hitting at the gut of Greece for years now.
It’s time the Greeks hit back by making the country the premium destination it always should have been. A better form of economics would help Greek hotel and resort owners, retailers, the tax office, and the tourists who flock to the Aegean nation to experience its uniqueness.